Report: With Retailer Support, Saturn Could Return to its Roots and Get Another Lease on Life at GM

Opel Corsa Design Sketch

The headline of an article in the Los Angeles Times two days ago read like many other articles published in newspapers and blogs all over the Web this week: "GM may pull plug on Saturn." But if you read the whole story written by Ken Bensinger, the article painted a much more optimistic picture for Saturn - one that's been overshadowed by the drama on Capitol Hill and the countless reports that speculate Saturn's days are numbered.

In reality, the sale or closure of Saturn is a last resort, one that "GM officials say they hope to avoid." Instead, Bensinger explained that behind-the-scenes there are plans underway to reposition the once separate GM subsidiary within its vehicle lineup. Saturn is important to the long-term success of General Motors because it typically attracts car buyers who traditionally only purchase import vehicles and would otherwise never consider a GM product. "Saturn, after all, was created to do almost everything that GM, industry experts, and many members of Congress say a modern car company has to do to survive in today's market," wrote Bensinger. "Make a limited range of small, fuel-efficient cars, then sell them through a small network of dealers for a profit."

Unfortunately, Saturn hasn't been a profit center for GM, so in order to help transform Saturn into a more viable brand, he says the company plans to:

  • "Thin Saturn's dealer ranks" by reducing the number of retail facilities. This attrition is already underway, as visitors have reported several of their local stores have closed their doors this year.

  • Reposition Saturn once again as GM's small car company, complete with a lineup of fuel efficient, European-engineered and North American-built small cars, "such as the subcompact Opel Agila." Saturn is also said to be eyeing a version of the next-generation Opel Corsa and Meriva.
  • "Kill existing larger models like the Aura - a near carbon-copy of the Chevy Malibu." The Outlook would also disappear, as Buick, GMC, Cheverolet, and soon Cadillac will all offer a version of the Lambda-based crossover. The goal is to make Saturn's new lineup full of vibrant, compact and subcompact models that are as different as possible from vehicles offered by GM's other North American brands.

Motor Trend lends some credibility to that last point with a report stating that going forward, Buick will partner with Opel on the development of its future vehicles. The two will team to market upscale vehicles worldwide. Buick will reportedly soon offer an updated version of the Saturn Aura in the US and China (insiders say the new Buick LaCrosse will be unveiled at the Detroit auto show next month) along with other large Opel vehicles. Meanwhile, Saturn would sell rebranded versions of Opel's small cars.

Going back to its roots and refocusing its efforts on small cars just might be what Saturn needs to do to once again be a sales success. After all, studies have shown that Saturn's movement upmarket with a fleet of larger vehicles has gone largely unnoticed by the general public. Brand awareness for Saturn's recently revitalized lineup has been almost non-existent as most folks still only see Saturn as the same small car company it was 15 years ago.

Retailers have always played an important part in Saturn's success, and today their role is more critical than ever. Up until now, GM has only said it will "accelerate discussions with the Saturn retailers, consistent with their unique relationship, to explore alternatives for the Saturn brand." Saturn General Manager, Jill Lajdziak, added that Saturn has been "working with our Franchise Operations Team (FOT) of retailers" to "create a new 'go to market' strategy for 2009," as well as ways to improve Saturn's "business model and financial performance."

Jill will be meeting with the FOT this coming week to "discuss and re-evaluate our strategy," according to her blog on "We now must accelerate our efforts. We have a unique relationship with our retailers and will work with them on our future direction."

The FOT is indeed something that is very unique to Saturn. It was a brilliant creation by Saturn's founders to give retailers a voice on all major decisions surrounding Saturn. Unlike with its other brands where GM has "unilateral decision-making power," Bensinger explains that "Saturn dealers have eight seats on a 16-member Franchise Operating Team and have a vote in major business moves." For instance, he says the FOT played an integral part in "the decision earlier this year to allow all GM dealers to sell certified pre-owned vehicles from all other GM brands." That level of collaboration gives retailers a sense of optimism about this whole situation. "I don't believe that Saturn will go away," Michael Greene, owner of Saturn of Whittier in California, told Bensinger. "I doubt very seriously they will close a brand they have put this much time and money into."

So all hope is not lost, Saturn fans.

In typical Saturn style, yesterday Saturn communications manager, Steve Janisse, posted an update to Jill's blog on ImSaturn about the whole situation. He thanked owners and enthusiasts for their support and stressed how the Congressional hearings were "paramount to GM and Saturn." Jill's FOT meeting next week will also be a pivotal one for Saturn, as it will likely set a new course for the brand. General Motors is "not giving up on Saturn," Steve reminded readers in his message. "We just need to adjust the business model and look at all options for the brand."

"Again, thanks for your thoughts and comments," he concluded. "We're making sure that Jill and the leadership team at Saturn is seeing them. We'll keep you posted on our progress with our retailers next week."

Source: LA Times, Motor Trend, Saturn